Now Reading: India plans 100 more flagged vessels to cut $75 billion freight bill
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India plans 100 more flagged vessels to cut $75 billion freight bill
India will add 100 flagged vessels in five years to slash the $75 billion it pays foreign shipping lines annually, Union minister Sarbananda Sonowal said at a National Shipping Board meeting on…
India will add 100 flagged vessels in five years to slash the $75 billion it pays foreign shipping lines annually, Union minister Sarbananda Sonowal said at a National Shipping Board meeting on Tuesday. The country currently has about 1,600 domestic ships, but moves only a fraction of its trade under its own flag.
Minister of state Shantanu Thakur said the annual freight outlay covers critical imports of crude oil, gas, coal and urea. Industry representatives at the event pointed out that operating under the Indian flag remains 16% to 20% costlier than foreign flags, attributing the gap to taxes on ship imports, maintenance, seafarers' wages and freight, plus higher domestic capital costs.
The National Shipping Board proposed a five-pillar roadmap tackling fiscal reform, assured cargo support, competitive financing, regulatory streamlining and ease of doing business. The board will now work with the ministry on implementation.
Indian Opinion Analysis
India’s 1,600-vessel fleet moves barely 10% of its seaborne trade, leaving the rest to foreign carriers that charge the nation an estimated $75 billion annually. Adding 100 ships in five years is modest against a global merchant fleet of 100,000 vessels, but the real bottleneck is cost: Indian-flagged operators pay 16, 20% more due to customs duties on imported ships, service tax on freight, and a levy on seafarers’ wages that foreign rivals avoid. The five-pillar roadmap, fiscal reform, assured cargo, cheap finance, simplified rules and ease of doing business, mirrors a 2023 ministry consultation paper that found no single fix works. The National Shipping Board’s proposals will now go to the ministry for a draft policy, with the next milestone likely being a cabinet note on tax changes and cargo reservation for Indian ships.
Source: economictimes.indiatimes.com
This brief was synthesised by AI from the source linked above.
